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Bear of the Day: Protolabs (PRLB)

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With the market bouncing sharply off Monday’s lows, it makes investors feel invincible. It seems like every stock I look at is jumping up. I’ve seen individual names move two, three, sometimes five percent easily over the last couple of days. I can tell you one thing is for sure, the move will not last forever. Eventually, investors will be looking for stocks with the strongest earnings. Those with weak trends will see pressure. One way to separate stocks with the best trends from the worst trends is by leaning on our Zacks Rank. Stocks with favorable ranks have strong earnings trends while those with unfavorable ranks tend to have weaker trends.

One stock with a weak earnings trend is today’s Bear of the Day, Proto Labs (PRLB - Free Report) . Proto Labs, Inc., together with its subsidiaries, operates as an e-commerce driven digital manufacturer of custom parts for prototyping and short-run production worldwide. It utilizes injection molding, computer numerical control machining, three-dimensional (3D) printing, and sheet metal fabrication to manufacture custom parts for developers and engineers who use 3D computer-aided design software to design products across a range of end markets. 

Currently, Proto Labs is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rating lies in the series of earnings estimate revisions to the downside from analysts. Over the last thirty days, three analysts have cut their estimates for the current year as well as next year. The bearish sentiment has cut the current year Zacks Consensus Estimate from $3.16 to $2.96 for the current year while next year’s number is off from $3.73 to $3.45.

The Rubber – Plastics industry ranks in the Bottom 8% of our Zacks Industry Rank. There are only two other stocks in the industry with Zacks Ranks. One of them is Zacks Rank #2 (Buy) Myers Industries (MYE - Free Report) . The other is Zacks Rank #4 (Sell) Essentra PLC (FLRAF - Free Report) .

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Proto Labs, Inc. (PRLB) - free report >>

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